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Verizon plans additional divestitures to allay Alltel merger concerns

Following on further discussions with the Justice Department (DOJ), Verizon Wireless told the FCC Tuesday that it would divest assets in 15 additional markets to put to rest any lingering antitrust concerns associated with Verizon’s proposed acquisition of Alltel Corp. Encompassing cellular spectrum and related properties in ten states, the latest proposed divestitures bring to 100 the total number of markets in which overlapping assets would be sold to win approval of the $28.1 billion transaction. To address anticompetitive concerns raised by the DOJ, Verizon agreed last July to divest assets that cover 85 markets in 15 states, including the states of North Dakota and South Dakota in their entirety. Verizon—which is poised to emerge as the nation’s largest wireless carrier as a result of the merger—also made a series of commitments to small and rural carriers that would enable any such carrier upon completion of the merger to keep established roaming rates with Alltel in force for the full term of its agreement or to elect the agreement of either merger partner if it already has roaming contracts in place with both Verizon and Alltel. Notwithstanding these pledges, rural and regional carriers, state officials and public interest groups continued to raise questions about the merger, prompting the FCC’s Wireless Telecommunications Bureau to seek additional information on the transaction from Verizon and Alltel parent Atlantis Holdings last month. In response to that request, Verizon told the agency that it would maintain Alltel’s GSM network “indefinitely” after merger closing and would also renew or extend roaming agreements on that network. Declaring, “we expect the [DOJ] to file a proposed final judgment and other documents addressing these divestitures,” Verizon promised the FCC: “as soon as those filings are made, we will promptly submit them in the record.” The FCC is expected to vote on the merger by year’s end and to condition approval upon fulfillment of the listed divestitures and other commitments.

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